The Sustainable Adaptive Business Model
The Sustainable Adaptive Business Model focuses on how your business (the light blue-green pentagon in the center) addresses sustainability in day-to-day operations. The gray boxes in the model represent the context for your business, including upstream and downstream value-chain components that impact sustainability.
At the heart of the model is the Sustainable Business itself. Sustainability considerations are pervasive inside an organization and throughout its connections with the outside world. Three key aspects of sustainability inside your business are:
- Adaptive Business Idea: Your Business Idea—the underlying concept that defines your company and distinguishes you from your competition—must adapt to changing conditions. Facing an uncertain future, you need a Business Idea that provides the flexibility to remain viable under a range of plausible future scenarios.
- Governance & Learning: You need to recognize shifts and disruptions early and rapidly change direction. This agility requires planning, monitoring of signals, and effective decision making and change management. For each decision, you need to record the conditions, rationale, expections for sustainability, and ensure that wise choices become best practices and mistakes are not repeated.
- Capabilities: Your business capabilities—consisting of people, processes, systems and technologies, and other resources—are the fundamental building blocks that allow you to deliver value to your customers. Important sustainability considerations include: resilient and efficient product, process, packaging, and lifecycle design; decreased dependency on scarce raw materials; resilient systems; prudent procurement and supply chain practices; and effective waste reduction.
The Sustainable Adaptive Business Model includes the following components that constitute your business context:
- Strategic Business Factors (society and politics, economy, environment, energy, materials, technology, and governance/regulations) constitute the changing conditions that pose the sustainability challenges for your business.
- Resources (natural, human, and man-made) provide the external materials and services upon which your business relies. Over the long term, many of these resources may become scarce, expensive, or unreliable, threatening the sustainability of your business.
- Competition & Collaboration: In our connected world, collaboration that leverages ideas and approaches from multiple businesses becomes a more sustainable approach than pure competition.
- Market: The connected world also introduces new paradigms and expectations. Online communities can affect how your company is perceived. Taking responsibility for the full product lifecycle, including upstream and downstream impacts, and incorporating sustainability-related practices, certification, and labeling enhances your position in the marketplace. Being a good corporate citizen is becoming essential in many industries.
- Waste: Companies have long regarded pollution and emissions as regulatory costs to be avoided. More recently, many companies have found that reducing any form of waste reduces their operating costs significantly. While forward-thinking companies have been recycling end-of-life products and reducing packaging, many governments have now begun to mandate such practices.
- Stakeholders (including investors/shareholders, financers, supply/value chain partners, employees, and customers) all have a keen interest in your company's sustainability. For example, recent meetings of shareholders have demonstrated how much influence stakeholders can have on corporate direction and policy.